Nobody can pin down the exact date when the concept of credit first saw the light of day, but it’s been a growth industry ever since, albeit in a strictly negative way, for some time.
Nobody can pin down the exact date when the concept of credit first saw the light of day, but it’s been a growth industry ever since, albeit in a strictly negative way, for some time. The number of loans, credit cards, and ways to borrow money has grown exponentially. Prospective applicants are regularly sent attractive proposals from banks and financial institutions, tempting them with various incentives and impressive interest rates.
• You are given a grace period during which you won’t need to make any payments.
• You can be offered a number of interest-free months.
The Debt Spiral
All these sound great. You will have the right intentions should you apply for any of these loans, but the fact is, your spending can get out of control and leave you with a number of loans to pay off or compounding credit card debt that gets worse every month. It can simply get too much for you and it becomes difficult to keep up with the payments.
If you have a monthly budget, paying several creditors each month might see that budget take a reality hit! You thought you would have money left over each month after paying everything off, but you are left scratching your head wondering where the money got to and how you are going to pay all of your outstanding bills. Remember, you are paying interest on the credit card and the loan while trying to pay off the loan as well!
This is why so many people choose to consolidate their debt.
By using a specialized equity release plan, you can successfully set up your debt consolidation. When you consolidate your debt against the value of your home, it’s basically a re-mortgage or property refinance home loan, if you like. The end result is that instead of paying your creditors individually, you only have one payment to make and that’s your mortgage payment each month!
The Hidden Bonus
After you have completed a debt consolidation do a little bit of arithmetic. Don’t be surprised to find that after your debt consolidation, the amount you are paying monthly will be less that the amount you were paying your creditors previously. By having less to pay out each month and tearing your hair out worrying about meeting your commitments, you might find that you have surplus money at month end, allowing you to spend on other things you may need, to save or to invest.
• Don’t forget that by paying a different lender, the terms and conditions related to your debt will have changed. If you are paying less each month it might mean a longer payout period.
• There will be a change in the interest rate you are paying.
Your small debts are all now part of your mortgage payment. Some additional benefits of this type of consolidation are:-
Maintaining a good credit history.
If you were struggling with lots of small debts, your chance of defaulting was greater. With all those small debts paid, you have probably done some good to your credit rating. A lender doesn’t care how the debt was paid, they just show on their records that it was paid within the loan period.
You are paying a lower interest rate through your mortgage than the one on your loan or credit card
There are many ways to consolidate debt and you need to be aware of any benefits or drawbacks. It’s important to fully understand how they work and what is best for your own personal situation.
Contact GCC Home Loans to discuss your financial situation and whether debt consolidation is the right option for you. With over 250 lenders within their network, they will be able to find the best fit to help you sort out your debt problems.
For more details about Bad Credit Home Loans, Please visit our website https://www.gcchomeloans.com.au/.